REG - Future Metals NL - Results for the Half-Year Ended 31 December 2023
15/03/2024 09:30
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RNS Number : 0439H Future Metals NL 15 March 2024
15 March 2024
Future Metals NL
Results for the Half-Year Ended 31 December 2023
The Board of Future Metals NL ("Future Metals" or the "Company", ASX | AIM:
FME) is pleased to announce the Company's unaudited consolidated interim
results for the 6 months to 31 December 2023 (the "Half-Year Report").
Please see below extracts from the Company's full Half-Year Report comprising
the:
- Directors' Report
- Consolidated Statement of Profit or Loss and Other Comprehensive
Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
A pdf copy of the full Half-Year Report is available at the following link:
http://www.rns-pdf.londonstockexchange.com/rns/0439H_1-2024-3-15.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0439H_1-2024-3-15.pdf) and
is also available on the Company's website at: www.future-metals.com.au
(http://www.future-metals.com.au)
For further information, please contact:
Future Metals NL +61 8 9480 0414
Jardee Kininmonth info@future-metals.com.au (mailto:info@future-metals.com.au)
Strand Hanson Limited (Nominated Adviser) +44 (0) 207 409 3494
James Harris/James Bellman
Panmure Gordon (UK) Limited (UK Broker) +44 (0)207 886 2500
Hugh Rich/Soman Thakran
FlowComms (UK IR/PR) +44 (0) 789 167 7441
Sasha Sethi
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
Key extracts from the Company's Half-Year Report are set our below:
Directors' Report
The Directors present their report for Future Metals NL ("Future Metals" or
the "Company") and its subsidiaries (together the "Group") for the half-year
ended 31 December 2023.
DIRECTORS
The persons who were directors of Future Metals during the half-year and up to
the date of this report (unless stated otherwise) were:
§ Patrick Walta - Executive Chairman (appointed 17 November 2023)
§ Jardee Kininmonth - Managing Director and Chief Executive Officer
§ Justin Tremain - Non-Executive Director
§ Elizabeth Henson - Non-Executive Director
§ Allan Mulligan - Non-Executive Director (resigned 17 November 2023)
§ Robert Mosig - Non-Executive Director (resigned 17 November 2023)
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities of the Company during the period were to:
§ Undertake development studies and exploration on the Company's 100% owned
Panton PGM-Ni-Cr project in the Kimberley region of Western Australia ("Panton
Project");
§ Define drill targets along ~18km of highly prospective strike ('Alice Downs
Corridor') within the Company's 100% owned exploration package, located ~12km
north-east of Panton. Targets include Eileen Bore, Palamino and Salk, none of
which have been effectively drill tested; and
§ Assess multiple regional opportunities for further enhancing the Company's
strategic land position in the highly prospective East Kimberley region and
abroad.
REVIEW OF OPERATIONS
Future Metals owns 100% of the Panton PGM-Ni-Cr deposit ("Panton" or the
"Project") in the eastern Kimberley region of Western Australia, a tier one
mining jurisdiction. The Project is located on three granted mining licenses
70km north of Halls Creek and 60km south of the operating Savannah Nickel Mine
owned by Panoramic Resources Ltd.
The Project is well situated for future planned operations, with good access
to roads, a deep-water port at Wyndham, sealed airstrips and local populations
at the nearby towns of Halls Creek and Kununurra. The Project is located
within the traditional lands of the Malarngowem, and the tenure sits within
the Alice Downs Pastoral Station.
PGM-Ni-Cr mineralisation occurs within a layered, differentiated
mafic-ultramafic intrusion referred to as the Panton intrusive which is a 9km
long, 3km wide and 1.7km thick south-west plunging synclinal intrusion. PGM
& Cr mineralisation is hosted within a series of stratiform chromite reefs
as well as a surrounding zone of mineralised dunite within the ultramafic
package.
Panton is the highest grade PGM deposit in Australia, with mineralisation
defined across three components within a JORC (2012) Mineral Resource Estimate
("MRE"); the Reef, the High Grade Dunite and the Bulk Dunite. The High Grade
Dunite is at the contact and runs parallel to the Reef throughout the entire
deposit. The Company's Scoping Study, completed and announced on 7 December
2023 (the "Scoping Study"), was based solely on the Reef and High Grade Dunite
components of the MRE such that the near-surface Bulk Dunite mineralisation
represents significant potential upside for future expansion.
Future Metals plans to produce both a high-grade PGM concentrate, and a
chromite concentrate from the Panton deposit. Such concentrates will be
trucked via sealed public roads to Wyndham for export to customers globally.
The total MRE at Panton is 92.9Mt @ 1.5g/t PGM(3E)(1), 0.20% Ni, 3.1%
Cr(2)O(3) (2.0g/t PdEq(2)) for contained metal of 4.5Moz PGM(3E)(1), 185kt Ni
and 2.8Mt Cr(2)O(3) (6.0Moz PdEq(2)). The MRE has been reported across three
separate units; the Reef, the High-Grade Dunite and the Bulk Dunite (please
refer to the Company's announcement dated 26 October 2023 and Table Five for
full details).
Table One | Panton Total Mineral Resource Estimate
Mass PGM(3E)(1) Ni Cr(2)O(3) PdEq(2)
(Mt) (g/t) (%) (%) (g/t)
92.9 Grade 1.5 0.20 3.1 2.0
(Moz) (kt) (Mt) (Moz)
Contained Metal 4.5 185 2.8 6.0
The Reef component has an MRE of 10.8Mt @ 5.6g/t PGM(3E)(1), 0.27% Ni, 14.6%
Cr(2)O(3) (7.0g/t PdEq(2)) for contained metal of 2.0Moz PGM(3E)(1), 29kt Ni,
1.6Mt Cr(2)O(3) (2.4Moz PdEq(2)).
Table Two | Panton Mineral Resource Estimate - High Grade Reef
Mass PGM(3E)(1) Ni Cr(2)O(3) PdEq(2)
(Mt) (g/t) (%) (%) (g/t)
10.8 Grade 5.6 0.27 14.6 7.0
(Moz) (kt) (Mt) (Moz)
Contained Metal 2.0 29 1.6 2.4
The High-Grade Dunite component has an MRE of 26.4Mt @ 1.3g/t PGM(3E)(1),
0.21% Ni (1.8g/t PdEq(2)) for contained metal of 1.1Moz PGM(3E)(1) and 54kt Ni
(1.5Moz PdEq(2)). The High-Grade Dunite is the mineralisation which sits
parallel to the reef mineralisation at the footwall and hangingwall contacts.
Table Three | Panton Mineral Resource Estimate - High Grade Dunite (1.4g/t
PdEq cut-off)
Mass PGM(3E)(1) Ni PdEq(2)
(Mt) (g/t) (%) (g/t)
26.4 Grade 1.3 0.21 1.8
(Moz) (kt) (Moz)
Contained Metal 1.1 54 1.5
The combined Reef and High-Grade Dunite mineralisation has an MRE of 37.2Mt @
2.6g/t PGM(3E)(1), 0.22% Ni, 6.2% Cr(2)O(3) (3.3g/t PdEq(2)) for contained
metal of 3.1Moz PGM(3E)(1), 83kt Ni, 2.2Mt Cr(2)O(3) (3.9Moz PdEq(2)).
Table Four | Panton Mineral Resource Estimate - Reef & High-Grade Dunite
Mass PGM(3E)(1) Ni Cr(2)O(3) PdEq(2)
(Mt) (g/t) (%) (%) (g/t)
37.2 Grade 2.6 0.22 6.2 3.3
(Moz) (kt) (Mt) (Moz)
Contained Metal 3.1 83 2.2 3.9
The Bulk Dunite has been reported at a 0.9g/t PdEq(2) cut-off for an MRE of
55.7Mt @ 0.8g/t PGM(3E), 0.18% Ni (1.2g/t PdEq(2)) for contained metal of
1.4Moz PGM(3E)(1), 102kt Ni (2.1Moz PdEq(2)). A detailed table for the Panton
MRE is provided in Table Five.
(1) Platinum-Group-Metals 3E refers to platinum, palladium and gold.
(2) PdEq (Palladium Equivalent). Refer to page 8 for calculation details.
( )
Table Five | Panton Mineral Resource Estimate (JORC Code 2022)
Category Mass Grade Contained Metal
(Mt) Pd Pt Au PGM(3E)(1) (g/t) Ni Cr(2)O(3) PdEq(2) Cu Co Pd Pt Au PGM(3E)(1) (Koz) Ni Cr(2)O(3) PdEq(2) Cu Co
(g/t) (g/t) (g/t) (%) (%) (g/t) (%) (ppm) (Koz) (Koz) (Koz) (kt) (kt) (Koz) (kt) (kt)
Upper Reef
Indicated 3.0 3.3 2.8 0.5 6.5 0.29 15.5 7.9 0.08 217 318 272 46 635 9 472 771 2 0.7
Inferred 4.9 3.2 2.7 0.4 6.4 0.30 15.6 7.8 0.10 221 506 431 65 1,003 15 761 1,227 5 1.1
Subtotal 7.9 3.2 2.8 0.4 6.4 0.30 15.6 7.8 0.09 219 824 703 111 1,637 23 1,233 1,998 7 1.7
Lower Reef
Indicated 1.4 1.3 1.7 0.1 3.1 0.17 10.7 4.1 0.04 200 59 79 6 143 2 151 186 1 0.3
Inferred 1.4 1.6 2.1 0.1 3.8 0.19 13.0 4.9 0.05 215 73 95 5 173 3 185 223 1 0.3
Subtotal 2.8 1.4 1.9 0.1 3.5 0.18 11.8 4.5 0.04 208 132 174 11 316 5 337 409 1 0.6
Total Reef
Indicated 4.5 2.6 2.4 0.4 5.4 0.25 14.0 6.7 0.07 211 377 350 51 778 11 623 957 3 0.9
Inferred 6.3 2.9 2.6 0.3 5.8 0.28 15.0 7.2 0.09 220 579 526 70 1,175 17 946 1,450 5 1.4
Subtotal 10.8 2.8 2.5 0.4 5.6 0.27 14.6 7.0 0.08 216 956 876 122 1,954 29 1,569 2,407 8 2.3
High Grade Dunite (Underground, below 300mRL, 1.4g/t PdEq cut-off)
Indicated 5.9 0.6 0.6 0.2 1.4 0.20 2.2 1.7 0.04 151 120 109 30 259 12 132 334 2 0.9
Inferred 20.5 0.6 0.6 0.1 1.3 0.21 2.3 1.8 0.04 160 425 373 87 885 43 478 1,154 9 3.3
Subtotal 26.4 0.6 0.6 0.1 1.3 0.21 2.3 1.8 0.04 158 545 482 118 1,144 54 610 1,488 11 4.2
Reef + High Grade Dunite
Indicated 10.4 1.5 1.4 0.2 3.1 0.22 7.3 3.9 0.05 177 497 459 81 1,037 23 755 1,291 5 1.8
Inferred 26.8 1.2 1.0 0.2 2.4 0.22 5.3 3.0 0.05 174 1,004 899 158 2,061 60 1,424 2,604 14 4.7
Subtotal 37.2 1.3 1.1 0.2 2.6 0.22 5.9 3.3 0.05 175 1,501 1,358 239 3,098 83 2,179 3,895 19 6.5
Bulk Dunite (Near surface, above 300mRL, 0.9g/t PdEq cut-off)
Indicated 30.3 0.4 0.4 0.1 0.9 0.18 1.1 1.3 0.03 144 384 363 103 850 56 337 1,220 9 4.4
Inferred 25.3 0.3 0.3 0.1 0.7 0.18 1.3 1.1 0.03 140 273 230 61 564 46 329 873 8 3.5
Subtotal 55.7 0.4 0.3 0.1 0.8 0.18 1.2 1.2 0.03 142 657 593 164 1,414 102 666 2,094 17 7.9
Total Resource
Indicated 40.7 0.7 0.6 0.1 1.4 0.19 2.7 1.9 0.04 153 881 822 184 1,887 79 1,092 2,511 15 6.2
Inferred 52.1 0.8 0.7 0.1 1.6 0.20 3.4 2.1 0.04 157 1,277 1,129 219 2,625 106 1,753 3,478 22 8.2
Total 92.9 0.7 0.7 0.1 1.5 0.20 3.1 2.0 0.04 155 2,158 1,951 403 4,512 185 2,846 5,989 37 14.4
Note: No cut-off grade has been applied to reef mineralisation and a cut-off
of 0.9g/t PdEq has been applied to the Bulk Dunite mineralisation and 1.4g/t
PdEq cut-off to the High-Grade Dunite mineralisation.
Scoping Study Highlights
§ Completed the Panton Scoping Study leveraging off ~A$50m of investment at
Panton to date, including previous feasibility studies, ~45,000m of drilling,
decline access to orebody & comprehensive bulk metallurgical testwork
§ The Scoping Study demonstrated the potential for Panton to be one of few
long life, globally significant PGM operations in the western world
§ Robust project economics, low capital intensity versus industry
benchmarks and strong leverage to PGM price appreciation, with:
o 1.5Moz PdEq(2) mining inventory from 9.8Mt @ 3.60g/t PGM(3E)(1), 0.25% Ni,
12.6% Cr(2)O(3) (4.77g/t PdEq(2)) for 1.1Moz PGM(3E)(1), 25kt Ni, 1.1Mt
Cr(2)O(3) concentrate
o Initial ~9-year mine life (study's mine plan covers 26% of the current
defined Reef & High Grade Dunite material and 10% of the overall MRE)
o PGM production averaging 117,000oz pa from high grade feed of 3.60g/t
PGM(3E)(1)
o PdEq(2) production averaging 161,000oz pa (incl. nickel and chromite
by-products)
o Low All-in Sustaining Costs (AISC), averaging US$789/oz (projected to be
in the 2(nd) quartile), providing resilience throughout the metal price cycle
§ Scoping Study demonstrates the potential for Panton to be one of the few
significant primary PGM operations in the western world. The Scoping Study
supports a high-grade, initial 9-year operation processing both Reef and
High-Grade Dunite material through a conventional crush, grind and flotation
flow sheet, producing:
Avg. Production PGM Chromite Conc. Nickel PdEq(2)
(Oz pa) (Tpa) (Tpa) (Oz pa)
1,250ktpa 117,000 134,000 1,200 161,000
§ Robust economics with Panton demonstrating strong financial metrics that
reflect the high-grade and low capital intensity of the Project.
Valuation Pre-Production Capex NPV(8%) IRR
(1,250kt) (A$m) (A$m) (%)
(pre / post tax) (pre / post tax)
Base Case 267 250 / 153 26% / 21%
PGM 5yr Avg Case 477 / 311 39% / 31%
PGM Basket By-product credits
Prices Platinum Palladium Gold Rhodium* Basket Price Nickel Chromite
(US$/oz) (US$/oz) (US$/oz) (US$/oz) (US$/oz) (US$/t) (US$/t)
Base Case 1,285 1,400 2,000 4,450 1,556 20,000 282
PGM 5yr Avg Case 1,040 2,115 1,870 12,450 2,200 20,000 282
* Note: Rh not included in Panton Scoping Study economic evaluation. Included
for comparison to South African PGM Basket Price only
§
§ Panton Base Case long term PGM pricing aligns with the ~85(th) percentile
of the cost curve (see Figure One), with the current South African PGM(4E)
basket price at an unsustainable ~65% percentile (i.e. ~35% of current global
operations losing money), near all-time lows
§ Panton's estimated AISC of US$789/oz (projected 2(nd) quartile) provides
the opportunity for the planned future operations to generate robust operating
margins in all phases of the PGM price cycle (see Figures One & Two).
§ Scoping Study includes just 26% of Reef & High Grade Dunite material -
mine life extension and valuation uplift to be targeted via progressive uplift
in Resource categorisation
o Average annual operating free cash flow of A$72m - clear value-add from
mine life extensions
§ Panton has the opportunity to achieve an accelerated pathway to production,
driven by:
o Project's location on granted Mining Leases
o >A$50m invested in the Project to date including an established portal
and decline, comprehensive metallurgical test work, >45,000m of drilling
& prior environmental studies
o Strong relationships with local stakeholders including the Traditional
Owners
§ Panton is optimally located, with good access to established
infrastructure:
o East Kimberley region of Western Australia, a top-tier mining and
investment jurisdiction
o ~1km from a sealed highway utilised by other mining operations
o ~70km from a sealed airstrip for employee and contractor transportation
o 300km from deep-water port at Wyndham, with easy access into key
potential markets
Figure One | PGM Industry's Cost Curve and Panton Project's positioning.
Source SFA (Oxford)
* - Further details for the industry cost curve analysis are shown under the
PGM Industry Cost Curve Position section of this announcement.
Figure Two | South African PGM(4E) Basket Price. Source: Bloomberg &
Company estimates.
*The PGM(4E) basket price is calculated based on the weightings of Pt, Pd, Au
and Rh production for the South African PGM industry. All other metals
production is considered a by-product and credited towards an operations' cost
base
§ Significant upside potential for Panton over and above the Scoping Study
outcomes from:
o Panton orebody is open at depth and interpreted to have improving
thicknesses and grades; further drilling may support mine life extensions
o Inclusion of other payable metals including rhodium, iridium, copper and
cobalt
o Resource delineation and inclusion of processing feed from nearby
projects such as the Eileen Bore Project or other discoveries within Future
Metals' 176km(2) exploration acreage
o Pricing upside associated with 'Western premiums' for scarce and
critical resources located in Australia supporting supply chain development
outside of China, Russia and South Africa
o Expansion potential from the significant near-surface Bulk Dunite
mineralisation which is not included within the Scoping Study
Figure Three | Panton PGM-Ni-Cr Project's Location
Project's Positioning
The Scoping Study highlighted the Project as being a potentially globally
significant producer of PGMs and chromite. Panton also represents one of the
only near-term development PGM projects outside of Russia and South Africa.
Additionally, the Scoping Study demonstrated that Panton has a lower capital
intensity than other similar PGM projects in the study phase, given its higher
PGM grade.
PGM Market Dynamics
The supply of primary PGM production is currently dominated by South African
and Russian operations. Such operations supply >80% of PGM(4E) (Pd, Pt, Au
& Rh) production (based on actual 2022 figures). Both of these countries
are subject to material investment and operating risks:
- Russia is currently subject to international sanctions which has
deterred Western investment into its mining industry, complicated the sourcing
of new and sustaining mining equipment for existing operations and caused
Western customers to seek alternative sources for metals such as PGMs.
- South Africa produced over 71% of primary platinum supply and 37% of
primary palladium supply in 2022. Many of the operations in South Africa have
operated for several decades, leading to deep mines and aging infrastructure
which ultimately increases operating costs and sustaining capital. These
issues are amplified by the chronic power availability issues in the country.
- South African deposits are also relatively high in rhodium, with the
recent profitability of many operations being driven by very strong rhodium
prices, which has subsequently declined (2021: Rh price ~US$29,000/oz vs 2023:
Rh price ~US$4,450/oz). This price decline, coupled with significant cost base
inflation has the potential to lead to mine closures in the near to medium
term.
PGM Industry Cost Curve Position
The Scoping Study demonstrated that the proposed operation has the potential
to be a low-cost producer of PGMs, with strong resilience for future
operations throughout the PGM price cycle.
Figure One shows that at the current PGM(4E) basket price of ~US$1,250/oz
approximately 35% of existing PGM production is loss-making. This creates
potential for a significant amount of supply to cease in the near to medium
term unless prices increase.
Panton's cash costs net of by-product credits and AISC of US$678/oz and
US$789/oz respectively demonstrate that if the Project was currently producing
it would be towards the middle of the 2(nd) quartile of PGM production,
thereby ensuring resilient margins in a depressed price environment and making
for an economically robust project capable of withstanding sustained downturns
in PGM prices.
Further details on the calculation methodology for the Company's stated cash
costs, AISC and PGM industry cost curve are set out in Chapter 10 of the
Scoping Study as released to the market on 7 December 2023.
Study Stage PGM Projects ex-South Africa and Russia
Table Six compares Panton's study-stage PGM project with two similar projects
located outside of South Africa and Russia. In contrast to other developers,
Panton stands out due to its higher PGM grade and significantly lower capital
requirements in contrast to the other developers.
Table Six | PGM Project Comparisons (ex-South Africa & Russia)
Project Owner Location Upfront Pre-Production Capital PGM(3E)(1) Grade Life of Mine PGM(3E)(1) Production Co-Product Production
(A$m) (g/t) (Years) (Koz, LOM Avg) (LOM Avg)
Panton Future Metals Western Australia 267 3.60 8.5 117 1kt nickel
134kt chromite concentrate
Gonneville Chalice Mining Western Australia 1,600 0.95 19 280 9kt nickel
(15Mt) 10kt copper
0.8kt cobalt
Marathon Generation Mining Ontario, Canada 1,243(4) 0.90 12.5 216 9kt copper
248koz silver
* - Refer to the Company's announcement of 7 December 2023 for source details.
(** )Pre-production capital estimate of C$1,110. AUD:CAD exchange rate of
0.89 applied.
Upside Opportunities
The Scoping Study underpinned a compelling investment case for progressing the
Project, and the Company sees significant further upside opportunities as set
out below:
§ Improved geological confidence in existing Resource: The Scoping Study
only included 26% of the Reef and High Grade Dunite MRE due to reporting
constraints in including Inferred resources. Average annual free cash flows of
A$72m in the Scoping Study demonstrate the significant upside in increasing
mine life through the inclusion of existing Resources.
§ Resource growth: The Panton orebody is open at depth and interpreted to
have improving thicknesses and grades; further drilling may support mine life
extensions beyond the currently modelled life of mine.
§ Additional payable metals: The Panton deposit contains metals either not
included in the MRE or not assumed to be payable. Additional work in the PFS
stage may support the inclusion of other payable metals including rhodium,
iridium, copper and cobalt.
§ Expansion potential: The Scoping Study does not include the near-surface
Bulk Dunite mineralisation. This component of the MRE comprises 55.7Mt @
1.2g/t PdEq(2), and future metallurgical studies may support a significantly
expanded operation.
§ Regional discoveries: The Company has recently expanded its exploration
position around the Panton Project. Additional nearby discoveries will
potentially further enhance the Project's economics through shared surface and
processing infrastructure. Future Metals' Eileen Bore Project is located ~15km
to the east of Panton and historic drilling indicates the potential to quickly
establish a resource estimate, progress metallurgical understanding and
include it in the overall project development plan.
§ Western price premiums: Pricing upside associated with being one of the
few western PGM & chromite projects outside of China, Russia and South
Africa. The Company will establish the Project's competitiveness on a carbon
intensity basis during the planned PFS, however given the grade, and intended
power source the Company is currently of the view that the Project will be
substantially less carbon intensive than many existing projects.
Note: MRE PdEq calculation details provided in Appendix One of the Scoping
Study (please refer to Company's announcement of 7 December 2023).
Palladium Metal Equivalents
Metal recoveries used in the palladium equivalent ("PdEq") calculations are
shown below:
§ Reef: Palladium 80%, Platinum 80%, Gold 70%, Nickel 45% and Chromite 70%
§ Dunite: Palladium 75%, Platinum 75%, Gold 85% and Nickel 40%
Assumed metal prices used are also shown below:
§ Palladium US$1,500/oz, Platinum US$1,250/oz, Gold US$1,750/oz, Nickel
US$20,000/t and US$175/t for chromite concentrate (40-42% Cr(2)O(3))
Metal equivalents were calculated according to the following formulae:
§ Reef: PdEq (Palladium Equivalent g/t) = Pd(g/t) + 0.833 x Pt(g/t) +
1.02083 x Au(g/t) + 2.33276 x Ni(%) + 0.07560 x Cr(2)O(3) (%)
Dunite: PdEq (Palladium Equivalent g/t) = Pd(g/t) + 0.833 x Pt(g/t) + 1.322 x
Au(g/t) + 2.2118 x Ni(%)
Strategic Exploration Position - Alice Downs Corridor
On 5 October 2023, an option agreement was entered into to acquire 100% of
Osprey Minerals Pty Ltd ("Osprey") which owns ~100km(2) of highly prospective
exploration tenements ("Osprey Projects") in the East Kimberley region of
Western Australia. The Osprey Projects are located within a 20km radius of the
Company's 100% owned Panton Project and made up of the Eileen Bore, Sally
Downs and Springvale Projects, collectively referred to as the Alice Downs
Corridor (see Figure Four).
The Alice Downs Corridor is characterised by a series of differentiated
pyroxenite, and gabbroic intrusions emplaced along a structural corridor, the
Alice Downs Fault, which represents a major north-northeast trending splay off
the deep-seated, mantle tapping, Halls Creek Fault.
Broad zones of disseminated and net-textured copper and nickel sulphides occur
within the host intrusions and are comprised of chalcopyrite, pyrrhotite,
pentlandite and pyrite. The previously mined Copernicus deposit is one such
example. Additionally, targets along the 18km Alice Downs Corridor, with
confirmed nickel-copper sulphide mineralisation, include Eileen Bore, Palamino
and Salk on the Company's tenure.
Figure Four | Regional Plan showing main targets along the Alice Downs
Corridor 18km strike. Note the location of the Eileen Bore inset Map for
Figure Six.
A majority of the project area is under cover which has limited the
effectiveness of historical surface sampling. There is significant potential
for blind deposits with no surface anomalism. There is an extensive
exploration dataset for parts of the tenement area including geophysical
surveys; magnetics, gravity, Versatile Time Domain Electromagnetic ("VTEM")
and Induced Polarisation ("IP") which concentrated at the Eileen Bore
Prospect. The main focus of historic drilling within the Company's tenure has
been on the near surface mineralisation at Eileen Bore.
Review of historical drilling combined with geophysical and structural
interpretations has identified multiple mineralised bodies that have a NW
plunge proximal to the Alice Downs Fault, with historic drilling ineffectively
testing these targets.
Eileen Bore Prospect
The Eileen Bore Prospect is an advanced exploration target with drilling
confirming wide zones of consistent Cu-Ni-PGM mineralisation from surface
along a known strike of approximately 300m. Mineralisation remains open down
plunge and at depth, with mineralisation only tested to 96m.
A total of 60 holes have been drilled at Eileen Bore for 5,761m. This
historical drilling demonstrated a disseminated Cu-Ni-PGM magmatic sulphide
body within a gabbro-pyroxenite host which extends over ~300m of strike. There
are multiple holes which have ended in mineralisation and modelling suggests
mineralisation is focused within a synformal fold axis and is plunging to the
north-northwest. Drilling down plunge remains open with scope for significant
additional mineralisation (see Figure Five).
Drilling results include:
§ 120m @ 0.73% Cu, 0.29% Ni & 0.86g/t PGM(3E) from 0m (EOH) ((EBRC 010))
o Incl. 16m @ 1.0% Cu, 0.36% Ni & 0.99g/t PGM(3E) from 100m
§ 96m @ 0.70% Cu, 0.29% Ni & 0.78g/t PGM(3E) from 24m (EOH) ((EBRC 003))
o Incl. 10m @ 1.08% Cu, 0.34% Ni & 1.04g/t PGM(3E) from 56m
§ 84m @ 0.54% Cu, 0.24% Ni & 0.75g/t PGM(3E) from 36m (EOH) ((EBRC 011))
§ 47m @ 0.62% Cu, 0.30% Ni & 0.60g/t PGM(3E) from 3m((AD07))
§ 36m @ 0.53% Cu, 0.25% Ni & 0.59g/t PGM(3E) from 40m((EBRC 002))
§ 64m @ 0.77% Cu, & 0.30% Ni from 32m (EoH) ((EP09))
§ 52m @ 0.74% Cu, & 0.29% Ni from 10m ((EP08))
Figure Five | Cross section of drilling at Eileen Bore demonstrating
mineralisation open at depth.
In addition, compelling targets at Eileen Bore are to the north of the area
which has been previously drilled, in an antiformal fold axis and to the south
along the Alice Downs Fault in a synform. Drill Target 2 to the north is based
on coincident magmatic chalcopyrite-pyrrhotite mineralisation identified in
peridotite rock chips by petrology and is associated with Ni-Cu, PGE and Au
soil anomalism. There is no historic drill testing in the area.
To the south, Drill Target 3 is associated with the same coincident soil
anomalism identified at Eileen Bore and Drill Target 2, which has also not
been drill tested. Targets are outlined in Figure Six below.
Figure Six | Eileen Bore Prospect showing 3 main drill areas: down plunge
mineralisation from section A-A' and Drill Targets 2 and 3.
Additional Targets
The Salk prospect is situated along strike to the north of Eileen Bore within
the same 100% owned exploration tenement. Historic drilling at Salk identified
nickel-copper mineralisation in an ultramafic that is interpreted to be in a
fault offset position from the Copernicus Mine. Results included 17m @ 0.31%
Ni, 0.18% Cu from 36m (including 2m @ 0.68% Ni and 0.31% Cu). The current
structural interpretation suggests mineralisation plunges to the northwest and
drilling at Salk has only been to the south.
Further along strike to the north, within the farm in and joint venture with
Octava Minerals Ltd (ASX:OCT) where FME is earning a 70% interest, is the
Palamino prospect (see Figure Four). Historic drilling confirmed a thick
pyroxenite body dipping to the northwest that was not previously mapped.
Disseminated sulphides were intersected with the best result being 5m @ 0.39%
Ni and 0.32% Cu in hole WCR016.
Forward Exploration Plan
Preparation for a drilling campaign to test the down plunge extension of
Eileen Bore and confirm adjacent near-surface economic mineralisation at Drill
Targets 2 and 3 is underway. This initial stage of drilling is planned to
commence in Q2 2024. Follow up stages will occur if initial drilling
determines the potential for a material amount of economic mineralisation.
In addition, field mapping and sampling will be undertaken along the Alice
Springs Corridor, with a particular focus on Palamino and Salk to confirm the
current geological model and refine these drill targets.
The Company continues to assess opportunities for further enhancing the
Company's strategic land position in the highly prospective East Kimberley
region. The Company sees a strong opportunity for development of a potential
'hub and spoke' strategy utilising Panton and Eileen Bore as potential feed
sources for a central processing hub.
Corporate
Successful fundraise of A$3.3m gross
The Company successfully raised A$3.3m gross through an underwritten
non-renounceable entitlement issue (the "Entitlement Issue"), details of which
were announced on 15 December 2023. The net proceeds from the Entitlement
Issue will be utilised for drilling and other exploration activities on the
recently acquired Eileen Bore Cu-Ni-PGM Project and to progress value
enhancement activities on the Company's Panton Project, following the recent
completion of the Panton Scoping Study.
The Entitlement Issue provided eligible shareholders the ability to acquire
one (1) fully paid ordinary share ("New Shares") for every four (4) shares
held by those shareholders registered at the Record Date at an issue price of
A$0.03 per share together with one (1) free-attaching option (exercisable for
A$0.10 per share on or before 22 June 2024) ("New Options") for every two (2)
Shares applied for and issued.
Personnel changes
The Company announced certain strategic Board changes in line with the
continued development of the Panton PGM Project and overall growth of the
Company.
Experienced board executive Mr Patrick Walta was appointed as Executive
Chairman. Patrick is a qualified metallurgist and mineral economist with
experience across both technical and commercial roles within the mining and
water treatment industries.
Mr Justin Tremain stepped down from the position of Non-Executive Chair,
remaining on the Board as the Senior Independent Non-Executive Director.
Non-Executive Directors Allan Mulligan and Rob Mosig retired from the Board to
focus on their other business interests.
Acquisition of Osprey
The Company acquired Osprey Minerals Pty Ltd on 17 November 2023 further to
exercise of its option, thereby significantly increasing its strategic
exploration position in the East Kimberley. As part of the acquisition, the
Company issued upfront consideration of 18,382,352 new ordinary shares,
subject to a 6-month escrow period. The Company will also pay deferred
consideration of A$325,000 in new ordinary shares or cash (at the Company's
sole election) 6-months from the date of the acquisition. Once the Company
drills 2,000m or more on the Osprey tenements, an additional A$325,000 will be
payable in cash or new ordinary shares at the Company's sole election. Any
such shares issued will be priced at the 5-day VWAP at the time of the
relevant milestone being met.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 8 February 2024, the Company announced the results of the aforementioned
Entitlement Issue which raised A$3.3m (approximately £1.7m) before costs. The
net proceeds from the Entitlement Issue will be utilised for drilling and
other exploration activities on the Company's recently acquired Eileen Bore
Cu-Ni-PGM Project and to progress value enhancement activities on the
Company's Panton Project, following the recent completion of the Panton
Scoping Study.
As part of the Octava Joint Venture Agreement, Future Metals was required to
make a final payment to Octava of A$200,000 in cash or shares, at Future
Metals sole election. Accordingly, on 29 February 2024, the Company issued
6,674,887 new ordinary shares to Octava Minerals Limited as deferred
consideration for the Octava Joint Venture. Subject to the Company meeting the
minimum annual cumulative expenditure, as set out in the Company's
announcement of 17 January 2023, Future Metals will earn a 70% interest in
both the Panton North and Copernicus Projects.
No other matter or circumstance has arisen since 31 December 2023 that has
significantly affected, or may significantly affect the consolidated entity's
operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires the Company's auditors to
provide the Directors of the Company with an Independence Declaration in
relation to their review of the half-year financial report.
This Independence Declaration is set out on page 16 of the full Half-Year
Report and forms part of this Directors' report for the half-year ended 31
December 2023.
This report is signed in accordance with a resolution of the Board of
Directors made pursuant to s.306(3) of the Corporations Act 2001.
Signed on behalf of the Board in accordance with a resolution of the
Directors.
Patrick Walta
Executive Chairman
Perth, Western Australia
15 March 2024
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2023
Note 31-Dec-23 ( )
31-Dec-22
$ $
Continuing Operations
Interest received 17,874 53,360
Government grants 19,686 -
Employee and director benefits expense (372,777) (297,309)
Professional and Consultants (119,552) (148,769)
ASX, AIM and share registry fees 3 (162,755) (236,077)
Travel expenditure (25,406) (69,593)
Exploration expenditure (963,123) (3,202,381)
Share based payment expense 11 (137,172) (517,195)
Amortisation/depreciation expense - (8,333)
Unrealised Foreign exchange gain/(loss) (12,595) (1,044)
Other expenses (341,646) (341,363)
(Loss)/profit before income tax (2,097,466) (4,768,704)
Income tax expense - -
(Loss)/profit after Income Tax (2,097,466) (4,768,704)
Other comprehensive loss
Items that may be reclassified to profit or loss
Other comprehensive income/(loss) - -
Other comprehensive income/(loss) for the period net of tax - -
Total comprehensive (loss)/income for the period (2,097,466) (4,768,704)
(Loss)/profit for the period attributable to:
Members of the parent entity (2,097,466) (4,768,704)
Non-controlling interests -
(2,097,466) (4,768,704)
Total comprehensive (loss)/income for the period attributable to:
Members of the parent entity (2,097,466) (4,768,704)
Non-controlling interests -
(2,097,466) (4,768,704)
(Loss)/profit per share
Basic and diluted (loss)/profit per share (cents) (0.49) (1.22)
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with the accompanying notes in the full
Half-Year Report.
Consolidated Statement of Financial Position
as at 31 December 2023
Note 31-Dec-23 30-Jun-23
$ $
Current Assets
Cash and cash equivalents 606,452 2,705,754
Trade and other receivables 76,808 120,519
Total Current Assets 683,260 2,826,273
Non-Current Assets
Deferred Exploration & Evaluation Expenditure 4 17,857,710 16,609,916
Property, Plant and Equipment 69,324 60,761
Total Non-Current Assets 17,927,034 16,670,677
Total Assets 18,610,294 19,496,950
Current Liabilities
Trade and other payables 5 426,863 576,019
Leave provision 30,194 30,194
Deferred consideration 4 325,000 -
Total Current Liabilities 782,057 606,213
Non-Current Liabilities
Contingent consideration 4 162,500 -
Total Non-Current Liabilities 162,500 -
Total Liabilities 944,557 606,213
Net Assets 17,665,737 18,890,737
Equity
Issued capital 6 37,259,385 36,524,091
Reserves 7 1,988,070 3,628,232
Accumulated losses 8 (21,581,718) (21,261,586)
Total Equity 17,665,737 18,890,737
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes in the full Half-Year Report.
Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2023
Issued capital Accumulated losses Share based payments reserve Total
$ $ $ $
Balance at 1 July 2022 29,689,231 (13,115,644) 3,076,807 19,650,394
Change in accounting policy((i)) - (836,822) - (836,822)
Balance at 1 July 2022 restated 29,689,231 (13,952,466) 3,076,807 18,813,572
Total comprehensive loss for the period
Loss for the period - (4,768,704) - (4,768,704)
Other Comprehensive loss - - - -
Total comprehensive loss for the period - (4,768,704) - (4,768,704)
Transactions with owners in their capacity as owners
Shares issued during the period 6,901,344 - (56,333) 6,845,011
Cost of issue (466,484) - - (466,484)
Share based payment (note 10 (a)) - - 517,195 517,195
Balance at 31 December 2022 36,124,091 (18,721,170) 3,537,669 20,940,590
Balance at 1 July 2023 36,524,091 (21,261,586) 3,628,232 18,890,737
Total comprehensive loss for the period
Loss for the period - (2,097,466) - (2,097,466)
Other Comprehensive loss
Total comprehensive loss for the period - (2,097,466) - (2,097,466)
Transactions with owners in their capacity as owners
Shares issued during the period 735,294 - - 735,294
Share based payment (note 10 (a)) - - 137,172 137,172
Balance at 31 December 2023 37,259,385 (23,359,052) 3,765,404 17,665,737
Please refer to prior period financial statements for details regarding the
restatement as a result of a change in accounting policy.
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes in the full Half-Year Report.
Consolidated Statement of Cash Flows
for the half-year ended 31 December 2023
31-Dec-23 ( )
31-Dec-22
$ $
Cash flows from operating activities
Payments to suppliers and employees (978,581) (1,186,415)
Payments for exploration and evaluation (1,109,503) (2,739,325)
Interest received 17,874 53,360
Grants received 17,065 -
Net cash (used in)/provided by operating (2,053,144) (3,872,380)
activities
Cash flows from investing activities
Acquisition of property, plant and equipment (8,563) (41,723)
Payment for exploration and evaluation (25,000) -
Net cash used in investing activities (33,563) (41,723)
Cash flows from financing activities
Proceeds from issue of shares - 6,845,012
Share issue costs - (466,485)
Net cash provided by financing activities - 6,378,527
Net (decrease)/increase in cash and cash equivalents (2,086,707) 2,464,424
Cash and cash equivalents at beginning of period 2,705,754 3,331,607
Effects on exchange rate changes on cash and cash equivalents (12,595) -
Cash and cash equivalents at the end of the period 606,452 5,796,031
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes in the full Half-Year Report which can be accessed
at via the following link: [RNS TEAM TO INSERT LINK TO PDF].
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